The
Old
Cause

by
Joseph R.
Stromberg

February
28, 2000

Free
Trade, Mercantilism, and Empire

HOW
TO HAVE ‘FREE TRADE’

Most
people these days  outside of certain left-wing and right-wing
populist circles  understand that global trade tends to increase
the prospects and prosperity of all people and nations that share
in it. Unfortunately, much confusion exists as to what "free
trade" actually is and how one goes about getting it. For many
in the US political and foreign policy Establishment, the formula
for having free trade would go something like this: 1) Find yourself
a global superpower; 2) have this superpower knock together the
heads of all opponents and skeptics until everyone is playing by
the same rules; 3) refer to this new imperial order as "free
trade;" 4) talk quite a bit about "democracy." This
is the end of the story except for such possible corollaries as
1) never allow rival claimants to arise which might aspire to co-manage
the system of "free trade"; 2) the global superpower rightfully
in charge of world order must also control the world monetary system.
Alas, there may be some problems with this formula.

Problems
or not, proponents of the American Empire have put forward
the United States as the one and only Last-Remaining-Superpower
on hand and the only such superpower with the needed
moral qualifications to rule the world. This last bit
derives from our having published somewhere in our remote
past a couple of high-sounding public documents  even
if we haven’t paid much attention to them of late. The
proponents of endless American world police work expect
to play a role in making the world as "orderly
as a Baptist convention presided over by the Honorable
Cordell Hull" (to quote Charles Beard). Thus their
advocacy may not be entirely without self-interest.
I hasten to add that I am not opposed to self-interest,
enlightened or otherwise. I merely note that it seems
to work better in the purely private sector. "A
man is never so innocently employed as when he is making
money," as the great Dr. Johnson said. It is the
"public spirited" self-interest of policy
makers which worries me.

‘FREE
TRADE’ CONSIDERED AS FREE TRADE

The
formula outlined above was decidedly not the 18th
and 19th-century liberal view of free trade.
Free traders like Richard Cobden, John Bright, Frederic
Bastiat, and Condy Raguet believed that free trade is
the absence of barriers to goods crossing borders,
most particularly the absence of special taxes – tariffs
– which made imported goods artificially dear, often
for the benefit of special interests wrapped in the
flag under slogans of economic nationalism. That was
the point, for instance, of the Anglo-French treaty
of 1861 which abolished a whole array of restrictions.

A
FUNNY THING HAPPENED ON THE WAY TO ‘FREE TRADE’…..

Classical
free traders never thought it necessary to draw up thousands
of pages of detailed regulations to implement free trade.
They saw no need to fine-tune a sort of Gleichschaltung
(co-ordination) of different nations’ labor laws, environmental
regulations, and the host of other such issues dealt
with by NAFTA, GATT, and so on. Clearly, there is a
difference between free trade, considered as the repeal,
by treaty or even unilaterally, of existing barriers
to trade, and modern "free trade" which seems
to require truckloads of regulations pondered over by
legions of bureaucrats.

This
sea-change in the accepted meaning of free trade neatly
parallels other characteristically 20th-century
re-definitions of concepts like "war," "peace,"
"freedom," and "democracy," to name
just a few. In the case of free trade I think we can
deduce that when, from 1932 on, the Democratic Party
– with its traditional rhetoric about free trade in
the older sense – took over the Republicans’ project
of neo-mercantilism and economic empire, it was natural
for them to carry it forward under the "free trade"
slogan. They were not wedded to tariffs, which, in their
view, got in the way of implementing Open Door Empire.
Like an 18th-century Spanish Bourbon government,
they stood for freer trade within an existing or
projected mercantilist system. They would have agreed,
as well, with Lord Palmerston, who said in 1841, "It
is the business of Government to open and secure the
roads of the merchant." British historians John
Gallagher and Ronald Robinson have referred to this
as "the imperialism of free trade." Quite
so, provided we don’t confuse it with the genuine free
trade espoused by anti-imperialists such as Cobden and
Bright. (You know that the other side has done well
in the semantic war when you have to put words like
"genuine" in front of formerly uncontested
concepts.)

Here,
John A. Hobson – despite his confusions with respect
to the alleged "overproduction" in advanced
capitalist economies  was directly in the line of real
free-trade thought. Hobson wrote that businessmen ought
to take their own risks in investing overseas. They
had no right to call on their home governments to "open
and secure" their markets.

FURTHER
MEDITATIONS ON THE AMERICAN IMPERIAL MIND

All
this leads one to further meditations on the American
imperial mindset. The late Murray
Rothbard noted that the "Leninist" theory
of imperialism was developed, "not by Lenin but
by advocates of imperialism, centering around such Morgan-oriented
friends and brain-trusters of Theodore Roosevelt as
Henry Adams, Brooks Adams, Admiral Alfred T. Mahan,
and Massachusetts Senator Henry Cabot Lodge."1
Building on the "overproductionist" fallacy
these gentlemen maintained the necessity of ever-expanding
foreign markets to the continued health of the American
economy. By socializing, in effect, the costs of finding,
opening, and securing such markets through an active
foreign policy, the federal government would guarantee
prosperity, float all boats, and – just incidentally
– benefit personally some of the advocates of this "large
policy." It might take a war now and then to sustain
such a policy, but that was just the way things had
to be.

These
worthy gents simply drew the opposite conclusion to
Lenin’s. He decided that imperialism was wrong. As a
Marxist, he blamed capitalism and proposed its abolition.
The proposition that capitalism – understood as free
markets and free trade – not only did not "cause"
imperialism but was, indeed, radically opposed to it,
tended to get lost in the 20th-century shuffle.
Writing of post-Cold War US foreign policy thinking,
Christopher Layne and Benjamin Schwarz comment that
"the foreign policy community looks to American
military power to impose harmony so that free trade
can take place." Thus "modern Manchesterism"
in this guise "is a fraud."2

Layne
and Schwarz further note that, properly analyzed, cheap
oil, one of the supposed benefits accruing to Americans
from the neo-mercantilist policy of Open Door Empire,
proves to be not so "cheap" after all. The
costs of maintaining an imperial presence in the Mediterranean
Sea and Indian Ocean – fleets, subsidies to allies,
weapons of locally massive destruction, and all that
– would, if added to the cost of the oil we actually
consume, demonstrate that the oil is, in fact, rather
dear.3 This might well
be a better example of Bastiat’s "The Seen and
the Unseen" in economic reasoning – far better
than that broken window – if it weren’t so complicated
that almost no one can understand who is actually paying
which costs. Short-cut hypothesis: the American people
are paying more for "opening and securing"
these markets plus the actual crude oil prices than
they would likely pay – absent these "enforcement
costs" – in any other conceivable set of political-economic
arrangements that might arise in the Middle East, even
in much-ballyhooed worst-case scenarios.

ABSOLUTE
SECURITY ABSOLUTELY IMAGINED

The
frequency with which worst-case scenarios are trotted
out as arguments for American imperialism – "If
we don’t blow Woggistan to bits now, we’ll have to fight
all their cousins later" – brings up another issue.
That is the time-honored demand of US policy makers
for absolute security and peace of mind. It’s bad enough
that so many mercantilist interest groups contribute
to policy formation without an inherited assumption
that we (or our leaders) must never, never feel threatened.

My
favorite example is the case of the Virgin Islands.
In 1916, while we were at peace with everyone and allegedly
very, very neutral, Secretary of State Robert Lansing
leaned on Denmark to "voluntarily" sell the
United States the Virgin Islands. The reasoning was
along these lines: We might, someday, be in a war with
those terrible Germans. Those terrible Germans are presently
at war in Europe. They might, one day, take a notion
to conquer Denmark. They then might decide to fortify
the Danish Virgin Islands, from which they might, eventually,
menace us, if we were ever in a war with them, which
we aren’t. Accordingly, bearing in mind the higher law
that governs these things, Denmark must cede the islands
to the US, lest we be driven to seize them outright,
over which act we would then have to feel guilty for
five or ten minutes, which guilt would be Denmark’s
fault. In normal parlance, we simply bullied the Danes
out of their islands; and they, a minor power, had to
smile and sign on the dotted line. Albert K. Weinberg
refers to this argument as "a lengthy series of
assumptions regarding mere contingencies."(4)

RULING
CLASS ARROGANCE AND ENDLESS WINDMILLS

It
is bad enough that the US Establishment sees itself
as historically destined or entitled to create an imperial
order of pseudo-free trade. It is bad enough that few
now remember that free trade – a very good thing – actually
meant something quite different from the hegemony of
One Great Super Power which talks a lot about free trade.
It is even worse when the One Power wishes to rule everywhere,
simultaneously, while believing at the same time in
its own sacrosanct security ("freedom from fear,
everywhere in the world?"). This a perfect setup
for eternal tilting at windmills, bombing or occupying
the world, and blaming anyone and everyone but themselves
if these leaders’ plans lead to any adverse reactions,
especially on their "own" territory. They’ve
been writing treatise after treatise lately about how
Americans – you and I – must be prepared to give up
all three of our remaining civil liberties to meet the
terrible threats which their policies have called ,
or may call, into being. Come to think of it, I don’t
know if they are that concerned about our security –
yours and mine – so much as the continuance of their
world overlordship, their concrete mercantilist interests,
to which we must add, in the case of the present lot,
their universal-democratic ideological abstractions.

Meanwhile,
let us at least not fall for their unspecified rhetoric
about "free trade."

Please
Support Antiwar.com

A
contribution of $25 or more gets you a copy of Justin
Raimondo's Into the Bosnian Quagmire: The Case Against
U.S. Intervention in the Balkans, a 60-page booklet
packed with the kind of intellectual ammunition you
need to fight the lies being put out by this administration
and its allies in Congress. Send contributions to

Joseph
R. Stromberg has been writing for libertarian
publications since 1973, including The Individualist,
Reason,
theJournal
of Libertarian Studies, Libertarian Review,
and the Agorist
Quarterly, and is completing a set of essays
on America's wars. He is a part-time lecturer
in History at the college level. You can read
his recent essay, "The
Cold War," on the Ludwig
von Mises Institute Website. His column, "The
Old Cause," appears each Monday on Antiwar.com.